EUR/USD Still Depends On Dollar Sentiment

EUR/USD declined last week after three weeks of gains. The pair looks neutral on Monday, changing hands around the 1.17 threshold, which serves as the key barrier for short-term buyers. USD index looks quite stable, but has started the week mainly on the back foot, which raises a chance for a more sustainable rebound in the single currency.

The general sentiment around the greenback remains the key river for the pair. As trade-war fears have abated somewhat, the overall sentiment in the global financial markets remains cautious, which supports safe-haven USD demand. In the short term, US June retail sales data will be in market focus. Should the numbers disappoint, the euro could regain the 1.17 mark and target the 1.1760 area which comes as the intermediate resistance on the way to 1.18. As long as the price remains below this barrier, downside risks will prevail.

As the broader picture shows, EUR/USD remains within a bearish trend, and there is a risk of a decline towards the lows around 1.15 as the buck could regain the impetus due to trade-war jitters and further “hawkish” signals from the Fed down the road.

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